When you list your house with a real estate agent or broker to lease it, most people are careful to make sure the fee is listed correctly in the contract. While that is certainly important, there are a whole host of other important terms in the typical real estate listing agreement that must be analyzed before you sign. Many of these additional clauses (some hidden in fine print and other more obvious but not very clear) bind you, the landlord/lessor, to having to pay the real estate agent who leased your rental property fees on top of the fee you agreed to have the real estate agent list and lease the house. At times, the additional fees could amount to thousands of dollars in additional fees over and above what you thought you were contracting for.
Many listing agreements also require the payment of a commission if your tenant renews the lease for another year. This is yet another reason to read and understand anything you are asked to sign before you sign it. Many more require that the payment of a full listing fee to the agent if you wind up selling your house to the tenants, even if that transaction was not even contemplated until after the lease is up. All contracts are negotiable, and you should make sure that you are comfortable with the terms of any agreement you enter into. If a specific condition is important to you and the person you are negotiating with does not want to give in, you may need to walk away and find someone else to work with. But, in order to do this, you must understand what the contract says, what the legal implications of the language are, and under what circumstances the different clauses kick in. Needless to say, this is one of those contracts that you should have your attorney look oer before entering into. If you don’t have an attorney, hire one who litigates contract disputes on a regular basis to review the contract and advise you BEFORE you sign it.
Once armed with the legal knowledge of what the contact says, you are in a better position to negotiate terms instead of blindly signing a piece of paper that is pushed in front of you. Oh, and by the way, I have had too many clients come to me after the fact (after they signed a contract) and tell me to help get them out of paying under the contract because they didn’t read the contract and/or didn’t understand what it said. Sorry to be the bearer of bad news, but not reading a contact is no defense. In Georgia, the law of contracts is clear: One he can read, must read. Armed with this knowledge, and having had the good sense to address some common scenarios that may play out under the contract before they happen (which is what a good lawyer helps you do), you can gauge if what you are asking for is unreasonable. If it is reasonable and the other side does not budge, realize this early on; do NOT sign the contract, and move on. Only do business with people who, in your best judgement, are reasonable and trustworthy. Obviously, this ability to weed out bad eggs is a variable one, but you should do your best to do this on the front end, i.e., before you sign a legal contract with someone with whom you are bound under the law to work with and honor the contract.
While I have been general in my description of contract situations and terms, etc., in the real estate listing situation, you should remember that the agent or broker with whom you contract with has probably entered into the this contract many more times than you have (I am assuming in the example that you are not a full-time real estate professional, but rather someone who has done well and bought one or two rental houses). The agent will know this contract well. The will get the contract signed, lease the home for you and then fully expect to get another commission if the person who leased the house buys it. Real estate is a tough business and agents work hard. They work long hours and most of the time it is at night and on weekends when everyone else is off. Trust me, if you sign a contract like this and you rent your home and then sell it to the renter, you will be contacted by the real estate agent’s lawyer. Do your homework on the front end, and this will not be a problem for you. And since most of these listing agreements have clauses that attempt to require the loser to pay the winner’s legal fees, the stakes can be high if you have to go to court.
Robert J. Fleming is a partner in the law firm of Katz Wright Fleming & Dodson, LLC in Atlanta, Georgia and Decatur, Georgia. He is a business litigator and personal injury attorney who has been handling cases for individuals and families who have been severely injured or died as a result of breach of contract or negligence for over 25 years. He practices in the Atlanta, Georgia area including handling lawsuits in Fulton, DeKalb, Clayton, Gwinnett, Cobb counties in Georgia and nearby cities such as Alpharetta, Chamblee, College Park, Conyers, Duluth, Decatur, Johns Creek, Jonesboro, Lawrenceville, Norcross, Peachtree City, Roswell, Sandy Springs, and Stone Mountain. If you or a family member has been seriously injured and would like to discuss your case in complete confidence, contact Robert J. Fleming directly on (404) 525-5150 or contact us online. We are here to help.